Refinery news (merged)

[IslandCrow]

Consumer advocates want regulators to examine the firms' plans.

The oil firms must be made to keep their refineries open even if they make a loss. We have a non-negotiable divine right to cheap oil

[dorlomin]

For large integrated supermajors?

http://finance.fortune.cnn.com/2011/08/ ... f-big-oil/

Is the low profitability of downstream activity now a drag on producers? Stories of BP splitting are also out and about.

The 70 year post war trend of consolidation, has it come to an end of is ConocoPhillips a one off?

[Pops]

I don't know, looks like it has more to do with speculators wanting to bet on the big payoff from a new discovery instead of a steady income from refining/marketing?

[rockdoc123]

It is really all about the sum of the parts being worth more than the whole. This was the reason that Encana split into two entities, one for natural gas (Encana) and the other for mainly heavy oil (Cenovus). For the longest time the two struggled but earlier this year both were doing well on the market (before the latest set of US and European bad news).
In my previous life I have been in the room when such discussions happened with the investment bankers. Given that they are the ones who make recommendations to the market as to whether or not to buy your shares it is only a matter of time before you fold and do what they recommend.
My own view is that for a company that counts on dividend distributions having both upstream and downstream interests is useful, not both parts of your business are likely to tank at the exact same time. If you have a year where you have production delays, bad exploration results but oil prices are high you are saved by your downstream business.
There also might be an element of "shrink to grow" here. COPI might see there is a good opportunity to acquire additional upstream assets at this time (a lot of the oil and gas companies are undervalued) and by splitting themselves off they can do a large acquisition or a series of medium sized ones without making the company so big as to be completely unwieldy.

[theragtopguy]

More evidence that peak oil is real and well known.....why would they do this otherwise?

http://www.philly.com/philly/business/2 ... =125219969

[peeker01]

Who'da thunk you can't make money in the oil business?

http://www.sfgate.com/cgi-bin/article.c ... P5EBC9.DTL

[pup55]

In the past six months or so there have been a dozen refinery transactions, and they are all for the same reason, the people that are in this business see this as the point at which they can get maximum value for their assets.

Two of these transactions are pretty major: Marathon Oil and Conoco Phillips have both spun off their refining groups into separate companies, treating their shareholders to a little dividend, and most importantly, getting them off of the books when times are unusually good because they know the current situation is only sustainable as long as the brent/WTI spread is what it is.

This flurry of activity is exactly what happened in 2007 and early 2008, an unusually good time in refining history, and for exactly the same reason, and you know what happened in mid 2008.

[dorlomin]

Two of these transactions are pretty major: Marathon Oil and Conoco Phillips have both spun off their refining groups into separate companies, treating their shareholders to a little dividend, and most importantly, getting them off of the books when times are unusually good because they know the current situation is only sustainable as long as the brent/WTI spread is what it is.

I'd head that ConocoPhilips was planning to focus on upstream activity as the downstream was so weak in terms of profit. I have seen articles talking about the de-integration of the integrated super major and so on. By tradition downstream is where the money is when oil price is low.
Perhaps I only have part of the story.

[kublikhan]

U.S. refinery workers and energy companies on Tuesday raced against a midnight deadline to negotiate a contract and avert the sector's first strike in more than three decades, which could shut 6 percent of U.S. refining capacity and boost fuel prices.

A strike could boost prices for gasoline, jet fuel, and other refined products at a time when crude oil prices above $100 a barrel have been a drag on the global economy. Ahead of the 12:01 a.m. Wednesday expiration of the current three-year contract, both sides remained at loggerheads in talks on wage standards, healthcare, retirement benefits, and health and safety standards.

The last nationwide strike by refinery workers was in 1980 and lasted three months. The United Steelworkers (USW) union, which represents hourly workers at refineries that account for about two-thirds of U.S. refining capacity, says health and safety standards remain the main obstacle to a deal.

"A strike would be potentially supportive for products and less so for crude," said Tom Bentz, director at BNP Paribas Prime Brokerage Inc. in New York. Other analysts said sagging U.S. fuel demand could offset potential supply impacts. Any shutdowns would likely drive up U.S. fuel prices, supported in recent weeks due to a string of plant problems, especially along the U.S. East Coast where poor economics have prompted companies to shutter refineries. Most U.S. refiners have made preparations to bring in contract workers and train replacements to keep their refineries churning in the event of a strike.

"Negotiations continue," said Emily Oberton, a spokeswoman for Shell, which faces potential strikes at refineries in Texas, Louisiana, Alabama, California that comprise about 1.2 million barrels of processing capacity. "Shell remains optimistic that a mutually satisfactory agreement can be negotiated with the USW."

While most refiners would keep their plants in operation during a strike using temporary replacement workers, just over a million barrels of capacity would be taken offline by companies in the event of a shutdown.

US refinery strike looms as contract deadline nears

[kublikhan]

The United Steelworkers union and Shell Oil have as announced a tentative deal on a new three-year contract covering Shell refinery workers across the United States. The deal was announced in statements issued by the two sides Tuesday night, hours before a midnight Tuesday deadline to reach a new agreement or risk a strike.

The deal also will be used as the model for other refiners such as Exxon Mobil, Marathon, Valero and ConocoPhillips to match.

Shell reaches tentative deal with refinery workers

[AirlinePilot]

245,000 bbl/day refinery.....Richmond, CA. Crude unit #4.

http://www.sfgate.com/bayarea/article/F ... 767221.php

[AirlinePilot]

RBOB prices up dramatically on this refinery fire/shutdown.

[Ferretlover]

I believe the news said that this was a gateway refinery?

[autonomous]

Chevron unit #4 refinery produces between 20% to 25% of the gasoline for Northern California, in addition to more than half the jet fuel used at all major Bay Area airports. It is also the third largest refinery on the west coast.

http://latimesblogs.latimes.com/lanow/2012/08/chevron-refinery-fire-gas-prices.html

[EdwinSm]

A gas explosion at Venezuela's biggest oil refinery has killed at least 19 people, starting a fire and causing extensive damage, officials say.

At least 53 people were also injured in the blast at the Amuay plant in Falcon State in the north-west of the country, officials announced.

The refinery, one of the biggest in the world, produces 645,000 barrels a day.

....

"The gas cloud exploded, igniting at least two storage tanks and other facilities at the refinery," the energy minister told state TV.

"It was a significant explosion, there is appreciable damage to infrastructure and to houses opposite the refinery."

http://www.bbc.co.uk/news/world-latin-america-19378657

Recently I read that Venezuela had to import refined products due to the state of their refinaries. This will not help. I guess that while accidents happen all over the world, part of the blame could be laid at the feet of Hugo Chavez for taking all the profits for social projects (good in themselves) without leaving enough to upgrade the facilities.

[pana_burda]

EdwinSm

Recently I read that Venezuela had to import refined products due to the state of their refinaries.

Indeed. Currently our facilities are unable to keep up even with our own rather small demmand of subproducts. And with this major event .... ¿ ? .

However, the drama of the situation is such that this refinary has been on and off not because of lack of upgrades but rather by the craftmanship of the ten times multiplied "workers" under its payroll.

By the way, to which country did you also read those economic benefits were heading to, uhh ?

[pana_burda]

From a venezuelan insurance broker:

Mi empresa X Insurance Brokers realizo un trabajo de ingenieria de riesgos hace unos anos con muchas recomendaciones de XXXX XXXXX de prevencion de incendio que no se realizaron, se engavetaron. La idea era que sus plantas fiesen calificadas como "HPT Highly protected risks" lo que permitiria una transferenica de riesgos a tasas muy bajas con lo cual PDVSA recuperaria la inversion en ingenieria de riesgos. Aca estan los resultados de tanta desidia , ignorancia y negligenica con los bienes de la nacion. Consecuencias economicas y de vidas humanas irreparables.

Word by word in spanish. Trad by Google .... with a bit of my aid. Obvious discretion in the name of the company as well as in the mentioned person.

X Insurance Brokers My company performed a risk engineering work in recent years with many recommendations XXXX XXXX fire prevention were not performed, are shelved. The idea was that your plants were rated "Highly protected HPT risks" which would allow a transfer of risks at very low rates whereby PDVSA would recover the investment in risk engineering. Here are the results of such apathy, ignorance and negligence with the assets of the nation. Economic consequences of human lives and irreparable.

[pana_burda]

http://www.elmundo.com.ve/noticias/petroleo/pdvsa/fotos---se-extendio-el-incendio-en-amuay.aspx

Tomorrow is the reopening day. Sure it is going to be hot as hell after this !!

[pana_burda]

From the article:

" El incendio de la refinería en Amuay se extendió con la explosión de un tercer tanque de combustible, aunque el Gobienro asegura que tiene "confinada" la situación "

" All is under control, reasures this .... gvmnt in spite another tank blowing up ".

Thanks God they moved the reopening `till friday .... as of now. Thats professionalism and responsability in action !!

Ahhh .... this time it is a free and deeply felt personal translation.

[pana_burda]

Analisys and recommendations of the refinaries on behalf of QBE insurance group. Update visit: March 5th to 8th 2012. Client comments = O

http://vzleaks.net/wp-content/uploads/2012/08/REPORTE-AMUAY.pdf

mmmmm .... I just wonder if they have claimed, and received their big fat criminal dirty check already ?